NFT, the Next Revolution?
Updated: Oct 11, 2022
Nowadays, traditional digital marketing strategies involve social media, content creation, influencers, SEO, and paid digital campaigns. However, these traditional methods are often viewed as outdated or irrelevant for an audience who is falling out of love with social media platforms and intrusive marketing techniques.
Therefore, companies are now trying to reshape the way they provide value to their communities as shoppers want to feel part of the brands they engage with on a regular basis.
In this context, shifting toward a community-focused strategy became an effective approach to build a loyal audience while communities can act as powerful and genuine marketing channels for brands.
These communities can come in the shape of private groups or forums and are built organically over time, consider Discord or Reddit. The latter bills itself as the “front page of the internet” and offers users the opportunity to create groups around their passions while giving them a place to feel like they belong.
With the boom of non-fungible-tokens (NFTs), a unique proof of ownership over a virtual item stored in the blockchain, these communities have discovered new ways to leverage engagement and decentralize their activities. Likewise, brands are also considering this new marketing opportunity to maximize the brand-customer experience and build highly engaged communities around an NFT project with every member acting as a stakeholder.
A recent collaboration between the company Yuga Labs, creator of the successful NFT collection "Bored Ape Yacht Club", and Arizona Ice Tea illustrates the growing brand interest in partnering with NFTs creators. The famous drink company purchased an ‘Ape Yacht Club’ token with the aim of leveraging the current hype around NFTs to boost its sales. An efficient marketing strategy at a fraction of the cost of traditional advertising campaigns. Similarly, the payment giant Visa bought a CryptoPunk NFT for $150,000 and saw its market capitalization shoot up to 5 $billion in a matter of days.
However, brands can also find breakthrough success on their own by leveraging the power of tokenized assets to encourage loyalty and advocacy among their existing communities.
Recently, the NBA has partnered with Dapper Labs, creator of the popular NFTs game CryptoKitties to produce a series of video highlights. Similar to trading cards, consumers can purchase these clips on the website NBA Top Shot or trade and sell them within a dedicated mobile app.
Likewise, Nike is planning to shake the sneaker industry by releasing NFTs digital footwear to guarantee a unique owner per model while ensuring the authenticity of the shoes. On top of that, the footwear giant could capitalize on the decentralized nature of the blockchain to bypass resale platforms and generate extra revenues on the sneaker global market, valued at approximately $79 billion in 2020.
With tokenization, companies are also no longer restricted from offering physical products to their fanbase. Meaningful experiences such as a backstage visit during a band concert, a private conversation with a star athlete, or a dinner with a celebrity can be tokenized and traded on the market. Eventually, companies could even involve communities through their decision-making process by giving NFT holders the right to vote on business-related topics.
Ultimately, opportunities to revolutionize the business of loyalty seem limitless. NFTs have the potential to bridge the gap between businesses and consumers, with the ultimate goal of building life-long relationships and devoted communities. However, brands are still in the early stages of sorting out how NFTs can enhance their customer's experience and change the way they interact with their audience. This marketing shift toward socialization and authenticity is bringing new exciting possibilities across multiple sectors, which one will be the next to jump on the NFTs bandwagon?
If you are interested to know more about NFTs, check out my last piece on Chinese NFTs for Dao Insights
Otherwise drop me a message if you want to exchange on the topic!